YOUR CART

​My Knowledge is Your Knowledge

Archives

Your grandchildren are growing in numbers and size, but with your children out of the nest, perhaps the thought has crossed your mind that your own home is too big and downsizing is on the horizon. But many in the boomer generation (born between 1946 and 1964) face the double duty of having to make the tough decision about your own parents; how to care for them, and for many, how to sell their homes to ensure that appropriate care can be funded properly moving forward.

For many,the parentsof the boomer generation have lived in their homes for 40, 50, sometimes 60 years, and it’s extremely difficult emotionally to let go of so many memories that become intertwined with these homes. But we are living much longer, and with that age comes the risk of living alone, or in the wrong type of home suitable for the realities of living into our late 80’s or 90’s. Selling is becoming the best option for these late years.
​ If you are facing this life-planning decision for your parents, you must realize that there is a critical difference between downsizing from your own home and selling your parents’ home: you have the benefit of knowing the history of what you have done to your property, how it is managed in your estate, and how you acquired it.

Selling Your Parents’ Home - Avoid These PitfallsFor your parents who have lived in homes for decades, that history may hold some surprises as they may have made decisions when you were a child that you were completely unaware, and remain so to this day. Those decisions can now present great risk to selling that property when you least expect it and when you most need the funds. Now is the time to do the research to avoid some of the real pitfalls I’ve encountered that have either completely blocked the sale of a home, or that nearly did without causing some high-anxiety, last minute scrambling.

Estate History - Confirm 100% Ownership. Unbeknownst to one of my clients needing to sell their parents' home of 50 years, the parents, decades earlier, had added additional extended family members into the deed. At some point a few of those relationships had soured. When it came time to sell the home, one of those estranged relations refused to release the sale, It delayed the deal for months. The lesson? Carefully reviewing the deed is extremely important.

Property Lines - They May Not Be What You Think. Can you imagine going to sell your home and discovering that part of your yard isn’t entirely in your own town? I had another sale that reached the final stages until the client realized through the appraisal that a mere 12 square feet of the property actually existed in an abutting town. The lesson? While this is rare, it’s always a good idea to confirm that the old shed or garden in the back of your parents' home actually exists on their property.

Home Improvements - Were They Permitted Properly? A client of mine backed out of a deal after the inspector noted some minor work done long ago did not pull local permits for the work. This was common practice in the past. The lesson? Take an inventory of that finished basement, kitchen expansion, or converted garage in your parents home to confirm a surprise isn’t waiting if permits weren’t pulled during renovation.

Valuation Step Ups for Capital Gains Tax. Finally, there are ways to minimize or eliminate capital gains taxes on the sale of property (details for a future post), but you will need to confirm that basis step-ups were not previously elected if one of your parents has passed and a trust was set up between your parents. A tax attorney will be needed to help calculate the basis of the home when you sell it. The lesson? Seek professional help to maximize financial returns, remember that there are tax laws designed to help you.

Many of us will face the transition point when we become the caregivers for our parents. All of the real-world examples above are good reminders that a little planning can go a long way to manage the process and to provide the best care and enjoyment of life that your parents deserve.

If you have any questions about the topics above, or if you'd like for me to do a free home value assessment and market evaluation of your home, just message me on Facebook by clicking the button below.

About Kelly CrowleyKelly Crowley is a Licensed Real Estate agent for Keller Williams Realty.Kelly has lifelong ties to the area and a keen understanding of the marketplace through her personal history and extensive knowledge of the varied communities she serves. Kelly invests her passion for the area by serving her clients with the utmost integrity, honesty and expert guidance in their real estate endeavors. When you’re seeking an agent who will put your goals first, call on Kelly Crowley. kellycrowley@kw.com c. 734.274.0707

In my lastpost I referenced the role that capital gains can impact how many baby boomers plan for the future. Obviously, maximizing the net profit is the ultimate goal whether it’s for your inherited land sale, selling your home when you downsize, or executing estate sales. I’ve been asked about capital gains repeatedly over the past 12 months, so I consulted Steve Withers, a Partner and Estate Planning expert at Coogan, Smith, LLP in Attleboro, MA, to consult in providing a short summary of the strategic tax options available for any seller to consider. The good news is that there appear to be a couple of options that could significantly reduce or even eliminate any tax obligations if planning is done correctly.

One of the more well-known IRS exemptions is the one-time, $250,000 ($500,000 for joint filers) exemption all taxpayers receive for the sale of a home. This exemption allows up to these amounts in capital gains to be tax exempt. But taxpayers can use it only once. So what other strategies exist that can also help to minimize or eliminate capital gains?

Your Current Income (Tax Bracket) MattersOne of the easiest strategies to consider in the planning phase is the timing of a sale with respect you your (or perhaps your parents) current income. The IRS exempts those individuals from any capital gains tax at the Federal level, which would save sellers between 15% and 23% of the net sale price if long-term assets are sold (ie home, land, personal property held for more than 1 year). In Massachusetts. It is more difficult to avoid state long-term capital gains taxes (5.1%), but as always consulting with a tax professional to confirm your specific situation is always a good idea.

Property Basis Step Ups for Trusts and Inherited PropertyThere is a second, slightly more complicated option that might allow you to avoid Long Term Capital Gains tax at both the Federal and State level. This provision in the tax code allows inherited property to "Step Up" the basis (the value of the land) to the current market value upon the date of inheritance when it occurs. This means that instead of showing that your home, land, etc was acquired for $10,000 40 years ago (as an example), when it passes to a trust or through inheritance, the new value would be listed at current appraised market value. Let's say $500,000 for easy math. This way, if you sold the land for $500,000, and it is valued at $500,000, your net gain is 0. There would be no tax required. It should be noted that Stocks and Bonds transferred in inheritance are treated by the IRS the same way as real-estate, but that holdings in retirement accounts (IRA, 401k), are not.
There are some additional steps to the second option above that require more detailed questions to be asked and a review of the history of the prior property transfers, such as the creation of living trusts, credit trusts, or whether property is held jointly, but both options above can be viable and should be explored sooner rather than later.
For real estate deals in Massachusetts, where the average real-estate sale can easily fall between $500,000 and $1,000,000, the potential tax savings could be in the five or six digit range.
With the uncertainty of long-term rates, and reports that the housing market is showing some weakness, there is no better time than now to create the plan that maximizes both the sale price and profits of what is most likely your largest personal asset.
About Kelly Crowley (www.kellycrowleyrealtor.com)Kelly Crowley is a Licensed Real Estate agent for Keller Williams Realty. Kelly has lifelong ties to the area and a keen understanding of the marketplace through her personal history and extensive knowledge of the varied communities she serves. Kelly invests her passion for the area by serving her clients with the utmost integrity, honesty and expert guidance in their real estate endeavors. When you’re seeking an agent who will put your goals first, call on Kelly Crowley. kellycrowley@kw.com c. 734.274.0707

About Steve WithersSTEPHEN K. WITHERS, JR., is a partner with the firm, whose practice covers a wide-range of legal fields, and focuses primarily in Estate Planning and Administration, Probate Law, Real Estate, and Small Business and Non-Profit Organizations. Steve is actively involved in serving the Greater Attleboro Area as a member and present chairman of the Attleboro School Committee, Rotary Club of Attleboro, Massachusetts (President, 2011-2012), a Director of the United Way of Greater Attleboro/Taunton, and as a member of the Sturdy Memorial Foundation, Inc. He is a member of the Attleboro Area, Bristol County, and Massachusetts Bar Associations.

In the Northeast, access to the commuter rail into major metropolitan areas is a way of life. Decisions about where to live can be made on access to getting into Boston, New York, Philly, and the DC metro areas.

In Massachusetts, the MBTA is almost an institution for commuters, and is as common as any highway. Hundreds of thousands of people depend on it to avoid the expense, time, and fatigue of driving into Boston each day. Simply drive to the nearest train station, park for the day, and let the train do the driving. You can work, sleep, or socialize for 30-45 minutes on your way to work.

As most commuters will also tell you, it’s a lot less expensive to use the rail than to drive. So much so that there have been many articles written that suggest home values in cities that have stops on the commuter rail command higher values than towns without a stop due to the demand for the rail. One study from 2013, completed by theAmerican Public Transportation Association (APTA) and the National Association of Realtors® (NAR) reveals that during the last recession, residential property values performed 42 (41.6) percent better on average if they were located near public transportation with high-frequency service. Many others seem to mirror this same conclusion.

But is this conclusion a reality or just anecdotal confirmation of our gut instincts? What are the real economics of the rail vs. car travel, and does having a commuter rail stop in your town increase the value of your home? Let’s first do the math, and then discuss a study that examined this very question when the MBTA re-opened a station in Scituate MA in 2007 after a 40 year absence.

The Math: Train Vs. DrivingTo compare real cost savings and to account for all factors (gas, depreciation, insurance, parking, commuter rail fees etc),I found a useful online calculator designed for this purpose. See link at end of article.

Using a base assumption of $100 per month to park in Boston (very light, I know, but let’s assume you know a friend of a friend who found you a spot), and assuming you pay roughly $25 per day for round trip and parking on the rail (let’s use Attleboro as the assumption), which would be a 45 mile commute each way. $2.50 per gallon average, and with a few other assumptions in the calculatorit shows that a typical commuter can save upwards of $150 to $300 per month depending on costs to park. Perhaps more. That’s between $1,600 and $3,200 per year - definitely not chump change. But are the economic savings, the reduced stress (unless you are always late for the train), and the other intangibles adding enough value to create higher demand for homes in towns that have a commuter rail?

Scituate, MA Study: Commuter Rail and Home ValuesIn my research I found a number of interesting studies, but one in particular released by Colby College in 2017 caught my attention. It examined the home values in Scituate, MA both before and after the MBTA Greenbush line was restarted in 2007 after a 40 year absence, and compared those values to homes in nearby Norwell and Hanover, which did not have a train stop added to the line. The results are surprising. Based on over 150 homes examined in Scituate that existed before and after the train stop was added, it found that those values showed no statistically significant increase to home values in Norwell or Hanover. This mirrors other studies that suggest that noise, traffic, and other factors seem to cancel out the economic benefits of a conveniently located station.

Obviously, I’m condensing the information to make this a readable post. But the general conclusion could be this: Choose a home because you love the home, it works for your family, you like the neighborhood or school system, and because you can afford it. If it is in a town with a commuter rail station, then that is a bonus, but probably not the driving factor for a decision. (Pun intended).CLICK HERE AND SCROLL DOWN THE PAGE FOR ALINK TO COMMUTER RAIL CALCULATOR

About Kelly CrowleyKelly Crowley is a Licensed Real Estate agent for Keller Williams Realty. Kelly has lifelong ties to the area and a keen understanding of the marketplace through her personal history and extensive knowledge of the varied communities she serves Kelly invests her passion for the area by serving her clients with the utmost integrity, honesty and expert guidance in their real estate endeavors. When you’re seeking an agent who will put your goals first, call on Kelly Crowley. kellycrowley@kw.com c. 734.274.0707

The vote is in, and a new high school is coming to Attleboro. If you are a homeowner, whether you voted for or against the debt exclusion this past spring (or perhaps didn’t vote at all), the only question that remains is this: Will the new high school really increase property values?

We’ve all heard the anecdotal arguments that good schools increase property values. There is ample evidence to support this conclusion. In a 2013 Realtor.com survey, one out of five of those surveyed said they would pay between six and ten percent more for a home – and one out of ten people surveyed stated that they’d go even higher, paying up to 20 percent more for a home with access to the right schools. (See Hopkington, Southboro, and Westboro). But does a new high school building have the same effect as a well funded school system?

The good news is that Attleboro is in position to have both. The most recent U.S. News and World Report rankings for Massachusetts had Attleboro ranked 79th in the state, a strong ranking that compares well with other towns in the area. And study after study show that a good school system is almost always one of the top five reasons people choose where to live.

Higher Taxes or Higher Property Values? Or Both?The new high school also means higher taxes, so will those new taxes we all have to pay actually result in a school building that increases home values more than the taxes paid? The data is somewhat muddled, but I did find two studies that analyzed and statistically validated that in fact the new buildings on their own have two measurable effects: 1) an increase in student test scores and 2) an increase in home values for the communities it serves.

In one 2011 study conducted at Yale, which measured the effects of major new construction in a historically poor area of Maryland, the study found that while the new construction initially lowered test scores due to the disruption during construction, after six years, the test scores and home values increased and were sustained increases in the entire area.

In a second study conducted at Michigan State that analyzed Ohio’s capital subsidy program which distributed over ten billion dollars for school construction and renovations to 231 school districts between 1997 and 2011, a similar conclusion was made. The housing price result suggests that a $10,000 increase in prior year capital expenditures is associated with a 1.2% increase in housing prices relative to the average housing price in our sample, which is similar in size to the 10% increase found in Neilson and Zimmerman (2014) as a result of $70,000 per pupil increase in capital expenditures. In Attleboro terms, when coupled with the State funds, Attleboro now has a $260,000,000 capital commitment spread over approximately 7,000 students in the entire school system, equating to $37,000 per student. Translation: It’s not unreasonable to think our home values will be worth 3-5% more than they would have been simply due to the new high school.

For a home worth $300,000, that would be $9,000-$15,000 in increased value with the expected increase in tax expenditure in 10 years approximately only $3,000. Obviously, time will tell and many other factors can have an impact, but if these peer-reviewed studies apply, it looks like we made a good investment.

About Kelly CrowleyKelly Crowley is a Licensed Real Estate agent for Keller Williams Realty.Kelly has lifelong ties to the area and a keen understanding of the marketplace through her personal history and extensive knowledge of the varied communities she serves. Kelly invests her passion for the area by serving her clients with the utmost integrity, honesty and expert guidance in their real estate endeavors. When you’re seeking an agent who will put your goals first, call on Kelly Crowley. kellycrowley@kw.com c. 734.274.0707

If you own land and have been thinking about selling, you might think it's a pretty clear-cut proposition.
​With land development, it is rarely that easy, and there are many details you will need to be aware of as you navigate selling your property. I’ve included a few examples of some obstacles I’ve encountered, and ways that you can prepare for them before you decide to sell.

Knowledge is Power -local zoning regulations change. Visit your local town hall and understand all regulations as it pertains to developing land. One of my clients recently discovered an ordinance change that is limiting the number of lots that can be developed; in turn this will impact the land value. Being knowledgeable about your land will empower you to make the right choices when it comes time to sell.​

PERC tests- Know your town’s perc season and plan accordingly. For example, if your land is located in a high water table area, it’s possible your land may not pass a PERC test in the middle of a wet spring. When this happens, it’s very difficult to sell the property. Work with the local Board of Health to understand your options and list your property accordingly.

Land configuration (property shape) can matter. Believe it or not, the shape of your property can impact value - Know your town zoning laws and how it could impact your property. One of my clients had multiple acres for sale, but didn’t have the frontage to get zoning for multiple lots. Despite the multiple acres - the land value was limited to a single lot.

​These are just a few of the many examples of challenges that can pop up when you finally decide to sell your land. It is important to know your land, understand the town regulations and learn the value of your land. An acre in one area can be vastly different than an acre in another, even if they are in the same town.
​
​Before you list your land, give me a call and I’d be happy to give you an initial assessment of your land and work with you to get the right information as it pertains to town rules and regulations.

Kelly has lifelong ties to the area and a keen understanding of the marketplace through her personal history and extensive knowledge of the varied communities she serves. Kelly invests her passion for the area by serving her clients with the utmost integrity, honesty and expert guidance in their real estate endeavors. When you’re seeking an agent who will put your goals first, call on Kelly Crowley. kellycrowley@kw.com c. 734.274.0707

The other day I ran into a friend at the grocery store and after discussing life and family and all the other things that we all find as usual grocery store talk, she asked me an interesting question. She explained that she recently had been pretty stressed out because she had looked up the value of her home on one of the many available online home valuation sites, and to her surprise it reported that her home was worth far less than what she thought. Adding to the stress, there was a possibility her home could be on the market in the not too distant future, so she asked me if there was anything she could or should do.

My advice, to her relief, was simple: Don’t get stressed out. Those sites are driven by algorithms that don’t reflect reality on the ground in local real estate markets, and they can be wildly different than market reality. I could see the stress level drop as soon as I said it, but it also led to the next question - what is it you know as a real estate agent that these sites can’t pick up?

I explained to her that every situation is unique, but to understand where the primary difference usually occurs is the computer algorithm. Most web based valuation sites simply scan home sales in a geographic area and come to an average price per square foot. They then try to apply that metric as a one-size-fits-all approach to every home in the area, regardless of what the real market would value and appraisals would support. If it sounds a little too clinical - it is.

So what are these intangibles that the computers don’t get but a great real estate agent will see? For one, they don’t go inside a home. When value is simply calculated a value per square foot, the approach ignores that two homes of the exact same size may have entirely different interiors. One may be recently refurbished with beautiful new hardwood floors, new appliances, granite counter tops, and tile backsplash, while the other may have had a recent seller who hadn’t updated the home in 40 years. Buyers certainly place a value on move-in ready homes. Algorithms can’t see it.

Second, the computers have a hard time accounting for location. Using those same two homes with the exact square feet as an example, one may be located on a very busy street while the other is nestled just two blocks away in a quiet neighborhood or on a cul-de sac. Again, both are factors that a buyer would value.

Finally, external factors also impact value, such as what might be situated next to or nearby a home (good and bad) that a buyer would value or discount. So that beautiful park next to one, or the fish factory next to the other (Ok, I’m exaggerating to make a point), all add up to value.

The point is, of course, if you’d like to get a true sense of your home’s value to properly plan for your next big homeowner decision, contact a real estate agent and ask for a free market assessment of your home.

Kelly has lifelong ties to the area and a keen understanding of the marketplace through her personal history and extensive knowledge of the varied communities she serves. Before choosing a career in real estate, Kelly spent 15 years as an advertising executive for many prominent advertising agencies representing Fortune 500 companies. Drawing upon these experiences and her expert knowledge of the area, Kelly was able to make a seamless transition to a real estate career.

Today, Kelly invests her passion for the area in serving her clients with the utmost integrity, honesty and expert guidance in their real estate endeavors. When you’re seeking an agent who will put your goals first, call on Kelly Crowley. kelcrowley@gmail.com 734.274.0707

Author

About Kelly Crowley : Kelly Crowley is a Licensed Real Estate agent for Keller Williams Realty.Kelly has lifelong ties to the area and a keen understanding of the marketplace through her personal history and extensive knowledge of the varied communities she serves. Kelly invests her passion for the area by serving her clients with the utmost integrity, honesty and expert guidance in their real estate endeavors. When you’re seeking an agent who will put your goals first, call on Kelly Crowley. kellycrowley@kw.com c. 734.274.0707